LP:Brent oil price remains mixed as euro debt concerns linger
Brent crude oil futures continue to linger with no real short term direction as as the Eurozone debt worries resurfaced after Standard & Poor’s downgraded Greece’s sovereign credit rating further into junk territory and said the outlook on Greek debt is negative.
Latest Brent Oil Price
In London, Brent crude oil futures for September 2011 delivery was trading at $117.65 a barrel, 06.25 GMT this morning on the ICE Futures Exchange.
Greece Rating Lowered Again
Standard & Poor’s downgraded Greece to CC from CCC, warning that last week’s rescue plan results in a selective default. “In our opinion, the terms of both the exchange and rollover options appear unfavorable to investors.” S&P said.
Adding to worries, reports suggested that German Finance Minister Wolfgang Schäuble warned fellow politicians that the euro area debt crisis was not put to rest by last week’s attempted rescue of Greece.
Spain and Italy Borrowing Costs Higher
Meanwhile, the cost of borrowing for Spain, as indicated by the yield on benchmark 10 year debt bonds, rose back to 6.02 percent from 5.935 percent, while the 10 year yield for Italy rose to 5.748 percent.
Problems for the Euro block can have a negative effect on oil prices as failure to address Europe’s debt problems could stall any recovery plans, denting oil demand at the same time.
